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NRF’s Big Picture: Key Payments Takeaways

In order to understand the future of payments executiveslook towards trends in retail. I wasreminded of this last week, after visiting New York for the National RetailFederation’s (NRF) annual ‘Big Picture’ convention. The event attracted the nation’sbiggest retailers, and everyone trying to sell to them in order to grab a sliceof the multi-trillion dollar retail pie. While I was part of many sessions andconversations of interest, I’ll mention one in particular that I thoughtcaptured some great insights about the future of retail. Titled ‘The Next Killer App–Stores: WinningOver the Storeless Generation,’ Lee Peterson of WD Partners gave an excellenttalk around an idea I’m very excited by—omnichannel commerce.

Through excellent, data-informed storytelling, Peterson madea compelling case for what the retail experience of the 21st centurywill, or should, look like. Based on extensive research on consumer preferencesand buying trends, he outlined two key principles that will organize the futureof brick-and-mortar retail. First, BOPS, which stands for Buy Online Pick-upin-Store. The consumer of 2015 no longer wants to spend valuable time and effortlocating the products they need in a large box store with endless, confusingaisles. Similar to the online experience, they expect to see only those optionsimmediately relevant to their needs and have instant fulfillment. The onlyreason to spend time at a store would be to try out something new, interactwith like-minded peers, and pick up what they have earlier placed an order foronline. Peterson identified this as thesecond key principle that will define the future of in-store commerce—the storeas a ‘social playground.’ For in-store shopping to remain relevant in the ageof e-commerce, it has to provide a rich, personal and interactive experience thatgoes beyond simply choosing a product and paying for the right to take it home.

These principles perfectly complement some of the ideas Ilaid out in a recent Mercator report titled ‘MobilePayments Strategy in the Omnichannel Age.’ I identified the goal ofomnichannel retail strategy as being able to retain a consumer’s attentionirrespective of where they direct it towards, whether it’s through mobile orthrough an in-store interaction. Consumers are already using their smartphoneswhile in-store to compare prices and read reviews, the sooner retailers learnto adapt to these new behaviors, the faster they can minimize loss of mindshareand revenues to Amazon. Payments is akey part of this, since monetizing the consumer’s attention once you havecaptured it involves being able to seamlessly complete a payment transaction.

The true ‘omnichannel’ experience will see the checkout lanewill become a thing of the past. Consumers will add products they see and likein the store to a digital cart on their app, before finally confirming thetransaction and picking up their bags on their way out.

Payment providers, whether POS terminal manufacturers ormobile wallet designers, many of whom were at the NRF convention showing offtheir latest technologies—such as BLE, NFC, and integrations that allow thirdparty developers to add value on top of the transaction layer—can be at theforefront of helping brick and mortar retailers make this transition. Many,such as First Data, with its unique Clover POS platform, are already making bigbets in this direction. Clover allows third-party developers to build apps that deliver value added services utilizingtransaction data and integration with consumer facing-apps.

The battle of the POS suppliers will be an especiallyinteresting one to watch as many retailers, both small and large, make once ina generation upgrades in order to coincide with the EMV liability shift andenable mobile payments for a growing number of mobile wallet users. Verifone, for instance, announceda partnership with Samsung to bring Android-based mPOS to enterprise andmulti-lane retailers. The NRF show saw significant presence from POS suppliersaround the world, especially the Asia-Pacific, looking to break into thelucrative US market.

Another interesting announcement at NRF was one by PayPalwhich announced the launch of anew PayPal Credit offering that enables online retailers to offer a monthlypayment option for their customers reducing cart abandonment and increasingsales.